Sony Corp. said on Dec. 9 that it was cutting more than 8,000 jobs worldwide and shutting plants as part of an overhaul of its business to cope with the global economic downturn.
The electronics giant said it would axe about 10% of its manufacturing sites, cut investment in its electronics business by about 30% and downsize or withdraw from unprofitable areas.
Sony, seen as a bellwether of corporate Japan, said it would lay off about 5% of its 160,000 workers in its global electronics business. It expects a further reduction of about 8,000 temporary employees.
The measures, which aim to save the company $1.1 billion a year, come as Japanese electronics reel from slumping profits due to the economic crisis. "In addition to the current global downturn, a surge in the yen further worsened Sony's electronics business, which relies on foreign markets for more than 80% its sales," said senior vice president Naofumi Hara.
Sony is planning to raise some prices in Europe to offset the blow from a stronger yen.
The company will postpone a planned expansion of a plant in Slovakia that assembles liquid crystal display televisions for the European market.
Sony, which makes Bravia flat televisions, Cyber-shot digicams and PlayStation 3 video game consoles, will also end production at two overseas plants, including one in France, that make tape and other recording media.
It will also realign its network of plants and shift manufacturing to low-cost countries.
"In addition to these measures, Sony will continue to implement measures as required to help assure both short and longer-term profitability and growth," the company said.
Sony said in October its operating profit plunged 90% in the second quarter of the financial year, hit by a surging yen, a weak global economy and intense price competition.
The electronics icon has endured a difficult spell in the face of tough competition from rival products such as Apple's iPod and Nintendo's Wii.
Last year it enjoyed a strong recovery under its first foreign boss, Howard Stringer. Under his watch, the group has shed non-core assets and axed thousands of jobs.
Copyright Agence France-Presse, 2008